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The Future Of AB?  
User currently onlinemiaintl From United States of America, joined Jun 2010, 1050 posts, RR: 0
Posted (2 years 2 months 1 week 3 days 4 hours ago) and read 7987 times:

Now that AB has joined the oneworld camp what will it's plans going forward be? Will finally become a mainline carrier with a hub and spoke system or will continue to cater to point to point holiday traffic? Also can we see it starting service to LHR, CDG, AMS, BRU and countless of important destinations missing from it's network?

31 replies: All unread, showing first 25:
 
User currently offlinePs76 From , joined Dec 1969, posts, RR:
Reply 1, posted (2 years 2 months 1 week 2 days 18 hours ago) and read 7598 times:

Hi!

Although I don't know much about the route systems of LCC vs mainline airlines, pricewise I haven't found Air Berlin to be LCC at all recently and they are pretty much the same as a mainline carrier. For example just had a look on their website and found the following fares:

London Stansted to Dusseldorf in August: £130 rtn.
Berlin to NY in August: £700 rtn.

These are pretty much exaclty the same kind of prices that BA, Lufthansa etc. offer.

Here's another article I found which was quite interesting:

http://airobserver.wordpress.com/201...rlin-no-longer-a-low-cost-airline/

I agree it is very hard to define exactly just what kind of carrier Air Berlin is! They seem to be doing pretty well though.

Many thanks.

Pierre


User currently offlineFlyingHollander From Netherlands, joined Jul 2011, 217 posts, RR: 0
Reply 2, posted (2 years 2 months 1 week 2 days 17 hours ago) and read 7446 times:

I believe AirBerlin is already a mainline carrier. However you are right that they aren't as focused on their hubs compared to airlines like KL and LH. If this is earning them money why change that? However, I do believe most of the future growth will be at DUS and BER which will make the hub and spoke system more important.

Service wise I found AB to be as good as or maybe even better than BA, AF and KL (I can't compare with LH).

Regarding a route to AMS. A route to DUS would have to be 100% connecting traffic as the airport is only a 2 hour drive away from AMS and even less from most of the country. The proximity already means there are quite a few Dutch people who use DUS as there originating airport. BER would be a better fit because of the O&D, however KL, HV and EZY have this well covered already. Besides that there aren't many destinations that you can reach with AB but not on another airline with one stop from the Netherlands. My guess is that AB will have to develop the BER hub more, especially to Eastern Europe, before we start seeing them serve AMS.



If it ain't Dutch, it ain't much.
User currently offlinefinnishway From Finland, joined Jul 2012, 310 posts, RR: 0
Reply 3, posted (2 years 2 months 1 week 2 days 17 hours ago) and read 7406 times:

Quoting Ps76 (Reply 1):
I agree it is very hard to define exactly just what kind of carrier Air Berlin is!

Air Berlin calls itself "as the only European airline to operate as a hybrid carrier". That quotation is from their website.


User currently offlinePs76 From , joined Dec 1969, posts, RR:
Reply 4, posted (2 years 2 months 1 week 2 days 17 hours ago) and read 7363 times:

Hi!

Quoting finnishway (Reply 3):
Air Berlin calls itself "as the only European airline to operate as a hybrid carrier". That quotation is from their website.

They are definitely hybrid in London because you have to travel to Stansted yet still have to pay full fare!   

But seriously though I do like them as an airline and would like to fly them one day. They even used to have their inflight magazine on a rack at their Stansted ticket desks for free which I always used to pick up. I wish more airlines would do things like that.

Many thanks.

Pierre


User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19233 posts, RR: 52
Reply 5, posted (2 years 2 months 1 week 2 days 17 hours ago) and read 7312 times:

AB is absolutely a stuck-in-the-middle airline strategy-wise. It is renowned for this, and it's about time they decide what precisely they wish to be.

Quoting Ps76 (Reply 4):
They are definitely hybrid in London because you have to travel to Stansted yet still have to pay full fare!

A few years ago I flew them on STN-TXL-MUC-DUS-STN in a day for less than £100 all-in. Not bad and a great experience.

Quoting Ps76 (Reply 1):
They seem to be doing pretty well though.

No they are not: they are a heavily loss-making airline. E.g. in its 2011 FY they made an operating loss of €247m. Since 2004 they have earned operating profit four years, with 2009 the highest with €28m. However, between 2004 and 2011 they generated a collective operating loss of €156m.



"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offlinePs76 From , joined Dec 1969, posts, RR:
Reply 6, posted (2 years 2 months 1 week 2 days 16 hours ago) and read 7220 times:

Hi!

Quoting Pe@rson (Reply 5):
A few years ago I flew them on STN-TXL-MUC-DUS-STN in a day for less than £100 all-in. Not bad and a great experience.

That is an incredible price for that many flights. The glory days of LCC flying in Europe! I actually used to prefer their old livery too with the darker red.

Many thanks.

Pierre


User currently offlineEddieDude From Mexico, joined Nov 2003, 7587 posts, RR: 43
Reply 7, posted (2 years 2 months 1 week 2 days 15 hours ago) and read 7043 times:

Quoting Ps76 (Reply 1):
Although I don't know much about the route systems of LCC vs mainline airlines, pricewise I haven't found Air Berlin to be LCC at all recently and they are pretty much the same as a mainline carrier. For example just had a look on their website and found the following fares:

London Stansted to Dusseldorf in August: £130 rtn.
Berlin to NY in August: £700 rtn.

These are pretty much exaclty the same kind of prices that BA, Lufthansa etc. offer.

Low-cost does not mean low-fare. Low-cost simply means that the airline's costs are lower than traditional "legacy" carriers for a number of reasons: they might not have a frequent flyer program, they may have few or zero partnerships with other carriers, they might try to operate to alternate airports, the terms and conditions of their workers' employment are less onerous than at standard carriers, etc. This may translate into lower fares but not necessarily.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineju068 From Vanuatu, joined Aug 2009, 2645 posts, RR: 6
Reply 8, posted (2 years 2 months 1 week 2 days 14 hours ago) and read 6957 times:
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Quoting finnishway (Reply 3):

I thought airBaltic advertized themselves as a hybrid carrier before Air Berlin did. I guess someone didn't do their homework.


User currently offlinePs76 From , joined Dec 1969, posts, RR:
Reply 9, posted (2 years 2 months 1 week 2 days 14 hours ago) and read 6887 times:

Hi!

Quoting ju068 (Reply 8):
I thought airBaltic advertized themselves as a hybrid carrier before Air Berlin did. I guess someone didn't do their homework.

I just had a look at AirBaltic out of curiosity and put in London-Riga return on 21/23 August. Total price: 335 Euros! With no luggage included either! And underneath there's a little cartoon pricetag saying "Lowest fare garaunteed"!

Suprisingly Lufthansa was the cheapest option for those dates/route at £128 rtn (although via FRA).
Next was Ryanair at £179 rtn (direct).

Anyway am getting very off topic. Sorry.

Many thanks.

Pierre

[Edited 2012-07-23 09:40:59]

User currently offlineLAXintl From United States of America, joined May 2000, 25514 posts, RR: 50
Reply 10, posted (2 years 2 months 1 week 2 days 14 hours ago) and read 6827 times:

Air Berlin needs to first figure out how to financially breakeven after years of loses.

Unless they turn things around they will became a name from the past.

Quoting Pe@rson (Reply 5):
AB is absolutely a stuck-in-the-middle airline strategy-wise. It is renowned for this, and it's about time they decide what precisely they wish to be.

   And this is the problem.



From the desert to the sea, to all of Southern California
User currently offlineSQ22 From Germany, joined Feb 2012, 99 posts, RR: 0
Reply 11, posted (2 years 2 months 1 week 2 days 12 hours ago) and read 6659 times:

They are still optimizing their network and cutting costs. Last week there was an announcement to cut flights from Hamburg.

http://www.bloomberg.com/news/2012-0...ons-from-hamburg-airport-says.html

I am wondering about the rumours regarding EY and AF/KL. Wouldn't AB be affected, too? Leaving OW and joining ST? What do you think?


User currently onlinemiaintl From United States of America, joined Jun 2010, 1050 posts, RR: 0
Reply 12, posted (2 years 2 months 1 week 2 days 8 hours ago) and read 6008 times:

Well if AB has no plans to change or evolve into a hub carrier then they have no buisness being in oneworld or any alliance. The lowcost model is not appropriate for oneworld or any alliance and I personally think it was a mistake to let AB into oneworld they just don't seem ready yet for such a big step. One of the reasons why AB was chosen for oneworld membership is because oneworld has a gapping hole in it's European network especially since malev's demise. Oneworld saw potential in AB to fill in the void left by Malev but AB is not living up to that potential.

User currently offliner2rho From Germany, joined Feb 2007, 2642 posts, RR: 1
Reply 13, posted (2 years 2 months 1 week 1 day 22 hours ago) and read 4658 times:

AB is losing money but I think that now with EY involvement, restructuring, OW integration, and the opening of BER hopefully someday, they will be able to turn the situation around. Beyond that, AB needs to make an extensive brand communication strategy: too many people, even on a knowledgeable forum as a.net, still see them as a LCC, owing to its past but not its present. They offer, at least in Y, as good or better service than the legacies. But as long as people see them as a LCC they will not recognize the added value and won't be willing to pay AB's legacy-level fares.

As for flying to many holiday destinations, I see no problem with keeping that as long as they make money. There are too many flights between the hubs anyway, getting in there would only bleed more money. There is however growth potential in more p2p flights or linking up underserved secondary destinations.


User currently onlinemiaintl From United States of America, joined Jun 2010, 1050 posts, RR: 0
Reply 14, posted (2 years 2 months 1 week 1 day 14 hours ago) and read 4332 times:

Quoting r2rho (Reply 13):

If AB is losing money and has a weak hub struture then why did they enter the oneworld alliance? What benefits do they bring to the table? How will they help strengthen the alliance?


User currently offlinesmbukas From Lithuania, joined Feb 2009, 205 posts, RR: 0
Reply 15, posted (2 years 2 months 1 week 1 day 6 hours ago) and read 4046 times:

Quoting r2rho (Reply 13):
AB is losing money but I think that now with EY involvement, restructuring, OW integration, and the opening of BER hopefully someday, they will be able to turn the situation around.

AB made good actions in last year, but still it is totally unclear what their strategy is. I think nobody can succeed without a strategy. EY investment and "cash-in" is very positive in restructuring and development. Entering the oneworld is also a good step forward differentiating from the LCCs and opportunity for forward integration. But it is still unclear how they benefit from both actions.


User currently offlineAirframeAS From United States of America, joined Feb 2004, 14150 posts, RR: 24
Reply 16, posted (2 years 2 months 1 week 1 day 6 hours ago) and read 4036 times:

Quoting Ps76 (Reply 1):
Although I don't know much about the route systems of LCC vs mainline airlines, pricewise I haven't found Air Berlin to be LCC at all recently and they are pretty much the same as a mainline carrier.

You know the difference between a LCC vs. a LFC, right?? They are not the same thing.



A Safe Flight Begins With Quality Maintenance On The Ground.
User currently offlineLAXintl From United States of America, joined May 2000, 25514 posts, RR: 50
Reply 17, posted (2 years 2 months 1 week 1 day 6 hours ago) and read 4019 times:

Quoting r2rho (Reply 13):
AB needs to make an extensive brand communication strategy: too many people, even on a knowledgeable forum as a.net, still see them as a LCC, owing to its past but not its present.

Yes agreed they have an image problem, but its much of their own doing.

After all - how would the public define an airline business model that has the following activity components? (per 2011 annual report)

- Intercontinental
- Europe
- Domestic
- Charter (47% of revenues)
- Package Tour Sales

Their mission statement says they aim to focus and positioning Air Berlin as the choice for "vacation travelers, families, business passengers, and private individuals." They will provide "best value for money in the market".

Sounds like a huge task to me. Sure maybe they can do each one very well, however combining them creates brand confusion, cost in added operational complexity, and having to make less than ideal sacrifices in each segment to help the other. (eg seat configurations).


Seems like goulash to me....

Quoting miaintl (Reply 14):
If AB is losing money and has a weak hub struture then why did they enter the oneworld alliance? What benefits do they bring to the table? How will they help strengthen the alliance?

I think OW was so desperate to get a partner in Germany, and AB was about the only potential choice.

Think about it – After BA/IB, OW really has no real European network. AY is a small airline in the far North, and Malev is dead. Having something in more in the heart of Europe in its largest economy was important for OW.



From the desert to the sea, to all of Southern California
User currently onlinemiaintl From United States of America, joined Jun 2010, 1050 posts, RR: 0
Reply 18, posted (2 years 2 months 1 week 1 day 5 hours ago) and read 3970 times:

Quoting LAXintl (Reply 17):

If it was simply a move of desperation then it has the potential to backfire big time on ow and they will end up regreting making such a stupid descision.


User currently offlineflyguy89 From United States of America, joined Feb 2009, 1936 posts, RR: 21
Reply 19, posted (2 years 2 months 1 week 1 day ago) and read 3857 times:

Quoting smbukas (Reply 15):
EY investment and "cash-in" is very positive in restructuring and development.

Agreed, and I think their entrance into OW will help them to further define themselves in taking a firm step in the direction of being more premium/elite-catering than previous.

Quoting miaintl (Thread starter):
Also can we see it starting service to LHR, CDG, AMS, BRU and countless of important destinations missing from it's network?

I could definitely see LHR at some point, being the massive OW hub that it is.

Quoting miaintl (Reply 18):

If it was simply a move of desperation then it has the potential to backfire big time on ow and they will end up regreting making such a stupid descision.

I don't really see how it could backfire unless AB suddenly turns into an airline with crappy customer service that will scare OW customers away. The worst thing that will happen is AB leaving OW (either voluntarily or through BK).


User currently offlinepoint2point From United States of America, joined Mar 2010, 2763 posts, RR: 1
Reply 20, posted (2 years 2 months 1 week 21 hours ago) and read 3686 times:

I would think that at some point going forward, AB could develop flights to/from BER into Central and Eastern Europe and then into a lot of the former Soviet Union, along with the Mideast and Indian subcontinent. I would think also that there could be some good amount of given O&D here, as well as providing natural connection opportunities for OW from the U.S. that could rival LHR, AMS, CDG, and FRA/MUC into those areas.

A least that's my    as to how best utilize AB and the new future airport in Berlin.

 


User currently onlinemiaintl From United States of America, joined Jun 2010, 1050 posts, RR: 0
Reply 21, posted (2 years 2 months 1 week 21 hours ago) and read 3659 times:

Quoting point2point (Reply 20):

I agree that BER could develop into a major hub to the former block states and even the fareast but someting tells me LH will never allow this to happen. LH hates competition and loves having a monopoly in the German air market and it will stamp out any growth coming from AB.


User currently offlinepoint2point From United States of America, joined Mar 2010, 2763 posts, RR: 1
Reply 22, posted (2 years 2 months 1 week 20 hours ago) and read 3606 times:

Quoting miaintl (Reply 21):
I agree that BER could develop into a major hub to the former block states and even the fareast but someting tells me LH will never allow this to happen. LH hates competition and loves having a monopoly in the German air market and it will stamp out any growth coming from AB.

I can see your point here.

Yes, if it would be mostly connects, I would agree with you.

However, on the other hand, if a good base of O&D could develop to/from BER, then it could be a different story, unless it would be LH that would jump into these routes from BER.

So I think that we can agree that it would depend on a couple of things happening and that is.... first, enough O&D has to be generated to/from BER..... and then IF that happens, does LH want to step in there itself, yes? And we have to start with the O&D that is either there or that can be generated, because if that's not there, then......


  


User currently offlinejumpjets From United Kingdom, joined Apr 2012, 834 posts, RR: 0
Reply 23, posted (2 years 2 months 1 week 19 hours ago) and read 3520 times:

There has been much debate elsewhere on whether EY or QR will join Oneworld. With EY holding a significant stake in AB and Oneworld's perceived need to maintain a robust presence in central Europe does AB in effect become a trump card for EY [if indeed it does want to join Oneworld]? If QR is preferred to EY there must be a real danger that EY will take AB off to Skyteam and leave Oneworld high and dry.

AB may not seem to be the logical fit for a global full service alliance, but it may prove to be able to punch above its weight because of its strategic importance.


User currently offlineSheridan125 From United Kingdom, joined Jun 2012, 25 posts, RR: 0
Reply 24, posted (2 years 2 months 1 week 19 hours ago) and read 3457 times:

Air Berlin is a very difficult airline to assess. It is hybrid formed out of several mergers. Those mergers have brought their own baggage with them is terms of aircraft, routes, costs and cultures. It is not a low cost airline in the image of ,say, Ryanair or Southwest. Only new start-ups can generate the disciplines of the ruthless styles of coat management that the real LOCOs enjoy. AB operates charter flights on a substantial scale. These have no value to Oneworld or any other alliance. Joining an alliance always puts up costs, for example on systems integration. When bmi joined Star it was widely believed in that company that their annual costs rose by £6 million per year. AB has no great records of mfinancial success. Why Etihad bought into it is impossible to fathom. They will never be able to buy a controlling interest because EU ownership rules make that impossible. AS AB's finances have been so weak it is unlikely that Etihad will get any reasonable dividends.
If Air Berlin turns itself into a scheduled airline only (for example as Monarch has done) it may have a strategic role in Oneworld but until then it will just be a small feeder into some Oneworld hubs.


25 Semaex : Nope, still heavily burdened by big red numbers. This is where EY comes into the equation. I think it's a real blessing that the Arabs stepped in. It
26 TW741 : For EY it means to have a feeder for their hub. For AB it means to fly pro-rate passengers with hardly any income for the airline. There was a good a
27 Semaex : There must be other reasons to this than desinterest in the southern european markets, as you mention. Usually when the economy of one country declin
28 r2rho : Agree. And assuming that all operations could be profitably maintained, perhaps a split into 2 brand names - one for sun&beach travelers, one for
29 Post contains links columba : A part of AB future will be that all to be delivered A32x will receive Sharklets, this news was announced a few days ago Edit Source http://www.travel
30 VV701 : But is that not because until now a country with a weak econony also has a weak currency? Greece's problem is that it has the same currency as the ma
31 Post contains images LAXintl : . They should bring back LTU name, and make them the leisure section. But I believe its even more complex then that. Within each of the components of
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